00:00strategic shift in corporate korea oil majors are sitting on record profits but they're not
00:05spending them on new refining capacity they're paying down debt and buying back shares here's
00:10the number that matters most five global oil companies posted a combined third quarter net
00:15profit of 50 billion dollars it's tuesday november 3rd let's look at a business story
00:20shaping corporate korea the conflict in the middle east has disrupted petroleum output across the
00:25region ukrainian attacks on russian refining facilities have tightened supply further
00:29as a result refining margins surged here's what the numbers show refining margins in europe rose
00:35roughly fourfold compared with a year earlier diesel and jet fuel crack spreads in the united
00:40states roughly tripled yet the majors chose not to rebuild capacity shell raised its buyback program
00:46to five billion dollars nearly 70 above its prior three billion exxon mobil announced an additional
00:5220 billion dollars in buybacks for next year bp directed much of its windfall toward debt repayment
00:57the logic is straightforward those companies expect petroleum demand to decline once the conflict
01:03ends as the energy transition gathers pace the international energy agency expects diesel shortages
01:09to persist into next year analysts at rabobank warn the pattern could push oil prices higher and fuel
01:15inflation across economies so what does this mean for boards and executives weighing capital allocation
01:20this year earlier we said that record profits are not translating into new capacity here's what
01:25that means for you every dollar returned to shareholders today is a dollar not spent on the
01:30infrastructure that could ease supply tightness tomorrow boards should be asking whether their own
01:35capital plans reflect a demand outlook or simply a reaction to the current margin cycle what to watch
01:40diesel shortages into next year and whether refining capacity follows the cash that's today's ai prism ceo
01:48this episode was produced with ai assistance based on seoul economic daily reporting ai prism is a
01:54won ifra award-winning series we'll be back tomorrow
